The comments by Esper on his first overseas trip as U.S. defence secretary threaten to inflame already heightened tensions between Washington and Beijing as they wage an escalating trade war.

China's increasing assertiveness, especially in the energy-rich South China Sea, has raised concerns within the region and the United States is challenging Chinese maritime hegemony and seeking stronger ties with nations pushing back against Beijing.

"We firmly believe no one nation can or should dominate the Indo-Pacific and we are working alongside our allies and partners to address the region's pressing security needs, Esper told reporters in Sydney.

"We also stand firmly against a disturbing pattern of aggressive behaviour, destabilising behaviour from China. This includes weaponising the global commons, using predatory economics and debt for sovereignty deals, and promoting state-sponsored theft of other nations' intellectual property." China has unnerved the region and angered the United States by installing military equipment and other facilities on artificial islands it has made in the disputed South China Sea.

China claims large parts of the South China Sea through which roughly $3.4 trillion in shipping passes each year. Countries including Malaysia, the Philippines, Taiwan and Vietnam contest the territorial claims.

U.S. Secretary of State Mike Pompeo on Friday decried "decades of bad behaviour" from China that have hampered free trade, laying out a case at a Southeast Asian forum in Bangkok for Washington's trade war with Beijing.

U.S. President Donald Trump on Thursday slapped 10% tariffs on $300 billion in Chinese imports, stunning financial markets and ending a month-long trade war truce. China vowed on Friday to fight back.

Both Esper and Pompeo met with their Australian counterparts in Sydney on Sunday at an annual security forum where the United States and Australia pledged to strengthen opposition to Chinese activities in the Pacific.

The United States and its Western allies worry that China is using foreign aid to secure greater influence over small Pacific countries which control vast swathes of resource-rich ocean.

Australia, traditionally the major power in the South Pacific, has promised up to A$3 billion ($2.04 billion) in grants and cheap loans to counter what Washington describes as China's "payday loan diplomacy".

"Cooperation with us and our Australian friends bring mutual benefits, not zeros, deals where one side wins and other risks losing," said Pompeo in a thinly veiled criticism of China's aid.

Meanwhile, Pompeo said he was "very confident" the United States would be able to build a maritime coalition in the Gulf, despite a lukewarm response from European and Asian allies.

($1 = 1.4708 Australian dollars)

(Reporting by Idrees Ali and Colin Packham; Editing by Michael Perry and David Evans)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

Sign up for our newsletter to get the latest on the transformative forces shaping the global economy, delivered every Thursday.

Email Address*

Country*

Please opt-in to receive news and information about Nasdaq’s services.

If you do not opt-in you will not receive any emails from Nasdaq.

Yes! I would like to receive Nasdaq communications related to Products, Industry News and Events.You can always change your preferences or unsubscribe and your contact information is covered by our Privacy Policy.